Ten traps for entrepreneurs …

Here are some traps I saw other entrepreneurs fall into (Of course, some of these I fell into myself multiple times !).

Watch out when you hear these lines.

# 10. “Let’s add Social Networking features and use AJAX. It’s the hottest trend around. Will help with valuations”

# 9. “He has 30 years experience in the Industry and can open doors for you with Whos-Who. Rest is easy for you. He wants to be on a retainer and not on sales commission”

# 8. “When Infosys and Wipro started there was no competition. They had all the time to grow. Now time is money. It’s a VC funded world.”

#7. “Small companies cannot sell. We need to be much larger to be taken seriously”

#6. “Let’s not to worry about profitability. Let us grab market share and scale”

#5. “They are old school, brick&mortar … won’t get it right on the web”

#4. “I am unable to sell because there is no marketing investment here. We need customers who call us, not other way around”

#3. “Just build the traffic, you can sell it Google or Microsoft or Facebook”

#2. “Just getting 0.5% of people in India as our customers … just 0.5% … means we will blow our revenue plan out of the water”

#1. A VC saying “I want you to raise more money sufficient for the next round as well now … so you can focus on building the business and not waste any time fund raising”

What do you think … did you hear these any time before? What else would you add to your top 10 list?

Learning from RahulG

RahulG is a great lesson for any entrepreneur …

1. You can aim for the moon, dream of reaching the stars and walk with your head in the clouds … but need to keep your feet on the ground – Know his guru Michael Porter taught him the power of grand vision and strategy … but he needs to appreciate the value of cheeky singles and keeping the score board ticking … and boring execution

2. You are only as good as your team – For all his enthusiasm and hard work, the team he projected to rule UP if they win wasn’t impressive … add to that bad advisors with foot-in-the-mouth disease !!

3. This is the world of alliances and re-usable libraries … you can’t do everything by yourself … co-opt others to help – Not finding good regional allies in an era of multi-party coalitions is the ultimate killer … true in politics … true in business … need partners.

4. Just do it – Why not just become a minister first, if not the PM … and just do it … how long will he “threaten to take over” … don’t over analyse and be paralysed … just do it.

Ignorance more frequently begets confidence than does knowledge

Charles Darwin noted “Ignorance more frequently begets confidence than does knowledge

Nobel prize winning psycho analysts defined what is known as the Dunning Kruger effect …

The Dunning–Kruger effect is a cognitive bias in which the unskilled suffer from illusory superiority, mistakenly rating their ability much higher than average. This bias is attributed to a metacognitive inability of the unskilled to recognize their mistakes” See here for more

So if you are an entrepreneur in an area that you have no prior experience or domain knowledge … remember there is an irony in “believe in your self … believe in your idea“.

Account for a learning curve … surround yourself with sources of learning (customers, advisors, field research etc.)

Yes or No? I vote Mu

There are a lot of questions you ask in a startup that can’t be answered with a simple “Yes” or “No“.

Get used to scenarios such as

You don’t know either way, for sure“, “You don’t know enough“, “It’s too early tell“, “Need more data“, “Need more time

In all these cases accept that fact that one needs to “Un-Ask the question“.

In Japanese (and Korean) there is a word called Mu (in Chinese it is Wu) … it’s like NULL value in programming. You could answer Yes, No or Mu ….

a.k.a. Wikipedia on the Mu

The term is often used or translated to mean that the question itself must be “unasked” – “mu” in this sense means to “unask” the question or that no answer can exist in the terms provided.

In Robert M. Pirsig’s 1974 novel Zen and the Art of Motorcycle Maintenance, mu is translated as “no thing”, saying that it meant “unask the question”. He offered the example of a computer circuit using the binary numeral system, in effect using mu to represent high impedance:

For example, it’s stated over and over again that computer circuits exhibit only two states, a voltage for “one” and a voltage for “zero.” That’s silly! Any computer-electronics technician knows otherwise. Try to find a voltage representing one or zero when the power is off! The circuits are in a mu state.

So don’t be afraid to say Mu … it may lead you ask a different question or answer it correctly in time.

So if your investor or employee or neighbour or wife or brother-in-law ask a question like “When will you be profitable” … relax, be confident, smile like a Zen master …. and  just say “Mu